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CIS Deductions rectification

Client has CIS deducted but not put through payroll

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Long time lurker, first time poster. 
I have picked a new LTD client this month. They have a finacial year end of March. They have informed me that they have had CIS deducted from a few of their invoices but the CIS deductions have not been put through their payroll. They have also submitted a final EPS for the 20/21 tax year on their payroll. To make matters slightly more interesting, the contracting company that has been deducting the CIS has used the directors UTR number instead of the company's UTR number (this was only for part of the year until it was picked up).

Just after some clarification if possible please. Can I put a normal claim to offset the CIS (include the CIS deducted against directors UTR) against their Corp. Tax bill or is there a couple more steps then this.

Apologies if this is a relatively basic procedure and the answer is simple, its just that I have never come across this before. 

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By rmillaree
20th Apr 2021 20:52

Its a complete nightmare when bods mix up personal and company UTR's - there is no easy simple rectification plan here.

ideally contractor making payment should rectify the wrong submissions by using the correct UTR and company name - any other route is making your life difficult.

Trying to claim claim refund via direct refund or offset "via cis ye team" is likely to be a route worse than death if UTR's don't match- you could try but good luck getting cis year end team to approve the refund due by providing reasonable evidence.

The other alternative here is for the director to claim the refund back via self assessment (use the relevant sole trader page) with the included notes on the sa return - do a matching directors loan entry in company accounts - historically this route has worked ahead of getting sense out of cis ye team although i havent tried this route in a good 5 years + This may be your least hassle botch it route.

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Replying to rmillaree:
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By ShoulderShrug
20th Apr 2021 22:16

Strangely enough I was thinking about going down the self assessment route. On looking into this matter further I found the the following article: https://www.accountingweb.co.uk/any-answers/cis-deductions-reported-as-i...

So this seems to happen quite often then.

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Replying to rmillaree:
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By Paul Crowley
21st Apr 2021 06:31

That is how I would start
Director's fault for giving over the wrong UTR

But happens when sole trader becomes director to same contractor

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JCACE
By jcace
20th Apr 2021 20:56

Your client will firstly need to submit an EPS to show the deductions suffered.
Then the challenge of unravelling begins...

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Replying to jcace:
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By ShoulderShrug
20th Apr 2021 21:46

Thanks, I might suggest that they re-file EPS for the year again but with the CIS Deductions.

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By Refs1
20th Apr 2021 21:18

Think you need to first establish if the invoices raised, were for the limited company or sole trader. If company, then more difficult as used the sole trader reference number. Did the client get paid into the limited company bank account or sole trader?

Once you know the above, then you can try to sort with HMRC, they might want to see sales invoices and bank statements to verify things.

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Replying to Refs1:
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By ShoulderShrug
20th Apr 2021 21:44

Invoices raised in LTD company and money paid into company bank account.

Ok, so I got to get myself prepared for a fun time that is ahead.

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By Refs1
20th Apr 2021 21:55

So amend your payroll with an EYU, to show the CIS deducted and request a repayment (believe there is online facility these days), give it a week and telephone HMRC to explain and see where it goes from there.

Done a few of these in last couple of years. Think it won’t be as complicated as you first thought. Obviously register client to be a subcontractor. Good luck

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Replying to Refs1:
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By rmillaree
21st Apr 2021 08:25

Refs1
"So amend your payroll with an EYU, to show the CIS deducted and request a repayment (believe there is online facility these days), give it a week and telephone HMRC to explain and see where it goes from there."

With the greatest respect Refs1 - they hardly process any cis reclaims before end of june- you have zero chance getting any reponse soon by chasing if its in the sytem . In my experience i have never known hmrc agree release of cis refund in company name last few years where its known the data does not match the contractator submitted totals without endless correspodence - this would be a formility if contrator had used correct UTR. without verifiable conformation from contractor i would confidently expect there will be non release and further info that would needed to be provided If contractor doesnt correct UTR.
Last time i checked cis team don't even accept phonecalls

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By DaveyJonesLocker
20th Apr 2021 22:28

Anonymity for no reason was soon blown

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Replying to DaveyJonesLocker:
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By ShoulderShrug
21st Apr 2021 08:02

I didn't mean to have anonymity status. I think when I was playing with the drop downs when creating the post I forgot it was on still.

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By Robyn
21st Apr 2021 16:17

I have had this in the past. HMRC told me I had to get the company who used the wrong UTR number to do the correction which they did. They then issued CIS deduction statements to the company I was doing. I then put the correct amounts through on an EYU. I then had to write to HMRC(with a breakdown and copies of statements) asking them to offset the refund against Corporation tax due and the balance to the Limited Company.

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